Oil Price - Where the Rubber Meets the Sky
Consumers chose to drive less over this past Memorial Day, the holiday that traditionally marks the start of the summer driving season. According to the EIA, for the week ended May 30, on a four-week moving average basis, gasoline demand fell by 0.4 percent and distillate demand (primarily diesel for trucks) dropped by 9 percent. Another bearish sign: Wednesday’s government inventory report showed that crude inventories for the week jumped by 3 million barrels to 366 million barrels. Analysts had expected a 1.7-million-barrel drop.
Investments in oil are increasing despite too-much supply and weakening demand. As a result, oil prices have jumped by almost 60 percent over the past three months.
On the NYMEX Friday, crude oil for July delivery fell 2 cents to $68.79 a barrel. Futures flirted briefly past $70, the highest level in six months. Prices are up 3.7 percent this week.
Analysts say the drivers are speculation, a rally in commodities and Friday’s report showing the U.S. lost fewer jobs than were forecast, signaling an improving economy.
Published Tuesday, June 16th, 2009 at 8:24 am and filed under Industry News.